Presidential nonprofit execs earn more than the president

May 31, 2013

Updated Aug. 21, 2013 1:17 p.m.

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Hungarian military guards of honor unveil the new statue of late US President Ronald Reagan, during a centennial commemoration in Budapest, Hungary, Wednesday, June 29, 2011. The 180 kilogram (400 pounds) and 2.18 meter (7 feet, 2 inches) tall bronze statue honors Reagan at the Freedom Square in central Budapest, to mark his efforts to free the people of Hungary from the yoke of communism. AP Photo/Bela Szandelszky

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Members of the National Archives and the President Clinton foundation tour the Clinton Birthplace Home Visitor Center on the grounds of Clinton's childhood home, in this June 12, 2002 file photo in Hope, Ark. AP Photo/Mike Wintroath

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President George W. Bush winds up to throw the first pitch of the 2006 baseball season during the opening game between the Cincinnati Reds and the Chicago Cubs Monday, April 3, 2006, in Cincinnati. Photo by Eric Draper, Courtesy of the George W. Bush Presidential Library

Hungarian military guards of honor unveil the new statue of late US President Ronald Reagan, during a centennial commemoration in Budapest, Hungary, Wednesday, June 29, 2011. The 180 kilogram (400 pounds) and 2.18 meter (7 feet, 2 inches) tall bronze statue honors Reagan at the Freedom Square in central Budapest, to mark his efforts to free the people of Hungary from the yoke of communism. AP Photo/Bela Szandelszky

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Some might quip that managing George W. Bush's presidential legacy is an unusually challenging job.

But is it so difficult that it demands compensation of nearly $700,000 a year?

James K. Glassman, founding executive director of the George W. Bush Institute, was the most well-rewarded of all the keepers of presidential legacies, according to The Watchdog's review of each nonprofit organization's tax returns. His total compensation clocked in at $684,858 a year.

Not far behind was the head of the Ronald Reagan Presidential Foundation, John Heubusch, who earned $537,639.

Note that the president of the United States earns less, with a salary of $400K and expense accounts of $50,000.

No one expects nonprofit executives to work for free – nor should they. But pay in this range tends to raise eyebrows.

Sandra Miniutti, spokeswoman for the nonprofit watchdog Charity Navigator, said that compensation above a half-million dollars is "much higher" than what's usually seen for charities of similar sizes. Typically, those nonprofits pay $245,000 to $297,000 a year, Charity Navigator's latest CEO compensation study found.

Now consider the Carter Center, the largest of all the presidential foundations in terms of annual revenue and global scope. Its president and CEO, John Hardman, earned something more in line with Charity Navigator's findings (and less than half what Dubya's Glassman earned): $331,709.

The head of the William J. Clinton Foundation -- the third-largest presidential foundation in terms of revenue, and on similar footing to the Carter Center in its ambitious global scope – earned $319,605.

These figures include base compensation, bonus and incentive pay, retirement and other deferred compensation, and nontaxable benefits.

Why are we telling you this? Well, Charity Navigator dinged the foundation of Dubya's dad for having one of the "10 Highly Paid CEOs at Low-Rated Charities." Turns out the George Bush Presidential Library Foundation spent almost as much on management as it spent on programs advancing its main mission – "the idea that public service is a noble calling" and "preserving the historic legacy of George Bush." That's a nonprofit no-no, as the overwhelming majority of a nonprofit's spending is supposed to be on programs.

So we thought it would be interesting to take a look at the other presidential foundations to see how they looked. These are not small endeavors: The 13 foundations took in $330.5 million in revenue, and spent $235.6 million.

Also of note: Six of the 13 foundations spent more than they took in in 2011, including our own Nixon library, which had the biggest gap.

MAIN MISSION

There's a yardstick nonprofit watchdogs use to measure how wisely charities spend their money.

Program spending – the reason the nonprofit is in existence – is supposed to consume at least 65 percent of its budget. The less-forgiving types prefer to see 75 percent of spending here.

On the opposite end of the spectrum, the Johnson, Roosevelt, Clinton and Carter foundations lavished the most spending on programs – with Johnson hitting the pinnacle at 91.5 percent.

The Watchdog's Interesting Program Service Award for this story goes to the Reagan foundation, which spent $2 million on celebrations in the United Kingdom and Europe in 2011 to mark Reagan's 100th birthday.

"The centennial anniversary moved overseas where Ronald Reagan's legacy of inspiring freedom and changing the world was celebrated," the foundation said in its tax return. "(C)elebrations included stops in Krakow, Poland, Budapest, Hungary, Prague, Czech Republic and London....These events included two statue unveilings, a street renaming, a mass of thanksgiving, a parliamentary memorial session, conferences and dinners. Dr. Condoleezza Rice represented Mrs. Reagan, and keynote addresses were delivered from foreign dignitaries at every stop."

MANAGEMENT

Nonprofit watchdogs frown on management costs that comprise more than 15 percent of spending.

Yet the Hoover foundation spent three times that running itself – 45.5 percent, or nearly half its spending. Bush Sr.'s foundation was not far behind, with 45 percent devoted to management.

On the more frugal end of the spectrum was the Kennedy foundation, spending just 3.7 percent on management, followed by Reagan (4.5 percent), Johnson (4.8 percent), Bush Jr. (6.4 percent) and the Clinton and Roosevelt foundations (7.2 percent each).

It takes money to make money, they say. But charity watchdogs don't like to see fundraising consume more than 10 percent of a nonprofit's spending.

The Bush Jr. foundation spent more than three times that – but the time period examined involved the run-up to his library's grand opening, which makes that number less surprising.

The Reagan foundation, however, spent about twice that – 19.7 percent – chasing dollars, followed by the Kennedy foundation, which spent 16.8 percent.

On the opposite end of the spectrum were the Ford, Roosevelt, Clinton, Johnson and Nixon foundations, which all spent less than 5 percent on fundraising.

Much of the fundraising activity comprised dinners and direct mail solicitation – but the Most Fun Award may go to the Bush Sr. foundation, which ran a wine auction. Cheers.

We'll be going into more detail about the finances of our own Nixon foundation soon. Stay tuned.

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